2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. Shares Code: 000869、200869 Shares Abbreviation: Changyu A、Changyu B Notice No.: 2019-Final04 Yantai Changyu Pioneer Wine Company Limited 2019 the Third Quarter Report Main Body October 2019 1 2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. I. Important Notice The board of directors, the board of supervisors, directors, supervisors and senior executives of the Company guarantee the truthfulness, accuracy and completeness of the contents contained in the third quarter report with no false records, misleading statements or significant omissions, and undertake individual and joint legal liabilities. All directors attended the meeting for deliberating this quarter re port. Mr. Zhou Hongjiang (Person in charge of the Company), Mr. Jiang Jianxun (Pe rson in charge of accounting work) and M rs. Guo Cuimei (Person in charge of accounting organ & Accountant in charge) assure the truthfulness, accuracy and completeness of the financial statements in the third quarter report. 2 2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. II、Corporate Information 1. Key accounting data and financial indicators Whether the Company makes retroactive adjustments or restates the accounting data of previous fiscal years. □Yes √ No The end of this The end of last year More or less than report period last year (%) Total assets (CNY) 13,191,032,907.00 13,117,729,052.00 0.56% Net Assets attributed to the shareholders of the listed 9,900,902,802.00 9,606,099,365.00 3.07% company (CNY) From the More or More or less than beginning of the less than This report period last year (%) year to the end of last year this report period (%) Operating income (CNY) 968,100,175.00 -6.22% 3,526,374,960.00 -8.66% Net profit attributed to the shareholders of the listed 125,557,834.00 -6.24% 728,961,623.00 -5.30% company (CNY) Net profit attributed to the shareholders of the listed company after deducting the 119,702,422.00 8.31% 672,193,117.00 -6.28% irregular profit and loss (CNY) Net cash flow from operating -- -- 645,331,713.00 -16.93% activities (CNY) Basic earnings per share 0.18 -5.26% 1.06 -5.36% (CNY) Diluted earnings per share 0.18 -5.26% 1.06 -5.36% (CNY) Weighted average for earning 1.31% -0.12% 7.38% -0.97% rate of the net assets Details of irregular profit and loss √Available □Not available Unit:CNY Amount from the Item beginning of the year to Explanation the end of report period Gain on disposal of non-current assets, including -166,664.00 the reversal of accrued impairment provision Government grants credited in profit and loss (except for those recurring government grants 69,007,365.00 that are closely related to the entity's operation, in line with related regulations and have proper 3 2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. basis of calculation) In addition to the effective hedging business related to the Company’s normal business, the profit and loss from changes in fair value arising from the holding of transactional financial assets, derivative financial assets, transactional financial liabilities and derivative financial liabilities, and 830,841.00 the investment income from disposal of transactional financial assets, derivative financial assets, transactional financial liabilities, derivative financial liabilities and other debt investments Other non-operating income and expenses 5,352,597.00 Less: Income tax effect 18,196,023.00 Minority interests effect(after-tax) 59,610.00 Total 56,768,506.00 -- The reasons shall be made clear and definitely as to the irregular profit and loss that the Company has defined by virtue of the Explanatory Announcement on Public Company’s Information Disclosure No.1 - Irregular Profit and Loss and as to regarding the irregular profit and loss as recurrent profit and loss as specified in the Explanatory Announcement on Public Company’s Information Disclosure No.1 - Irregular Profit and Loss. □Available √Not available There is no situation regarding the non-recurring profit and loss as defined and specified in the Explanatory Announcement on Public Company’s Information Disclosure No.1 - Non-recurring Profit and Loss as recurrent profit and loss. 2. The total number of s hareholders and the shareholding of top 10 shareholders at the end of the report period 1) The total number of common shareholders and the total number of preferred shareholders with recovered voting power as well as the shareholding of top 10 shareholders Unit: share 42639 Total number of preferred 0 Total number of common shareholders with recovere shareholders at the end of report d voting power at the end o period f report period (if have) The top 10 common shareholders Number Pledged or Shareholdin Number of of frozen Character of Name of Shareholders g ratio holding restricte shareholders Share Num (%) shares d status ber shares Domestic non- YANTAI CHANGYU GROUP state-owned 50.40% 345,473,856 0 -- 0 CO. LTD. legal person GAOLING FUND,L.P. Foreign legal 3.08% 21,090,219 0 -- 0 person CHINA SECURITIES State-owned 2.25% 15,440,794 0 -- 0 FINANCE CORP legal person 4 2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. BBH BOS S/A FIDELITY FD - Foreign legal 2.22% 15,241,826 0 -- 0 CHINA FOCUS FD person SHENWAN HONGYUAN Foreign legal SECURITIES(HONG KONG) 1.27% 8,732,233 0 -- 0 person LIMITED FIDELITY PURITAN TRUST: Foreign legal FIDELITY SERIES INTRINSIC 0.93% 6,350,762 0 -- 0 person OPPORTUNITIES FUND GUOTAI JUNAN Foreign legal SECURITIES(HONGKONG) 0.76% 5,207,553 0 -- 0 person LIMITED CENTRAL HUIJIN ASSET State-owned 0.69% 4,761,200 0 -- 0 MANAGEMENT LTD. legal person VANGUARD EMERGING Foreign legal MARKETS STOCK INDEX 0.55% 3,788,487 0 -- 0 person FUND FIDELITY CHINA SPECIAL Foreign legal 0.55% 3,779,202 0 SITUATIONS PLC person The shareholding of top 10 shareholders with unrestricted shares Name of Shareholders Number of Type of share unrestricted Type of Number shares held share YANTAI CHANGYU GROUP CO. LTD. 345,473,856 A share 345,473,856 GAOLING FUND,L.P. 21,090,219 B share 21,090,219 CHINA SECURITIES FINANCE CORP 15,440,794 A share 15,440,794 BBH BOS S/A FIDELITY FD - CHINA FOCUS FD 15,241,826 B share 15,241,826 SHENWAN HONGYUAN SECURITIES(HONG 8,732,233 B share 8,732,233 KONG) LIMITED FIDELITY PURITAN TRUST: FIDELITY SERIES 6,350,762 B share 6,350,762 INTRINSIC OPPORTUNITIES FUND GUOTAI JUNAN SECURITIES(HONGKONG) 5,207,553 B share 5,207,553 LIMITED CENTRAL HUIJIN ASSET MANAGEMENT LTD. 4,761,200 A share 4,761,200 VANGUARD EMERGING MARKETS STOCK 3,788,487 B share 3,788,487 INDEX FUND FIDELITY CHINA SPECIAL SITUATIONS PLC 3,779,202 B share 3,779,202 Among the top 10 shareholders, Yantai Changyu Group The explanation for the associated Company Limited has no associated relationship or accordant relationship and accordant action action relationship with the other 9 listed shareholders, and the of the top 10 shareholders relationship among the other shareholders is unknown. Explanation for the top 10 shareholders who involved in No financing activities and stock trading business(if any) Whether or not the Company’s top 10 common shareholders and top 10 common shareholders with unrestricted shares conduct agreed buy-back transaction during the report period □ Yes √ No 5 2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. There are no top 10 common shareholders or top 10 common shareholders with unrestricted shares in the Company conduct agreed buy-back transaction during the report period. 2) The total number of preferred shareholders and the shareholding of top 10 preferred shareholders □Available √Not available 6 2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. III Major Issue 1. Situation and reasons on changes in main financial data and financial index during the report pe riod √Available □Not available Compared the end of the report period with the beginning of the year, Notes Receivable decreases by 100%, mainly due to adjustment to Receivables Financing resulting from change in accounting policy; Accounts Receivable decreases by 18.12%, mainly due to the reduce in credit sale resulting from the reduce in the direct supply business of sales business; Interest Receivable increases by 107.65%, mainly due to the received one-off interest resulting from the expiration of fixed deposit; Accounts Payable decreases by 20.34%, mainly owing to the payment of previous debt; Advances From Customers decreases by 29.42%, mainly owing to the reduce in accumulated Advances From Customers resulting from the improvement in the Company’s production efficiency and the shortening of supply period after receiving the payment; Interest Payable increases by 389.91%, mainly owing that the Company’s overseas enterprise need to pay the expired loan interest all at once; Deferred Tax Liabilities decreases by 25.15%, mainly owing to the amortization of assets appraisal appreciation resulting from the business combination not under common control. Compared the first three quarters in 2019 with the same period in last year, F inancial Expenses and Interest Expenses respectively decreases by 29.91% and 29.42%, mainly owing to obtainment of forestry loan with discounted interest this year; Non-operating Income increases by 30.57%, mainly owing to the increased waste income including offcut sales etc. Compared the third quarter in 2019 with the same period in last year, F inancial Expenses decreases by 26.68%, mainly owing to the increase in Interest Income; Interest Income increases by 187.05%, mainly owing to the increase in fixed deposit and call deposit; Other Income decreases by 83.38%, mainly owing to the year-on-year decrease in received government grants; Loss for Impairment of Assets increases by 739.26%, mainly owing to the loss on inventory valuation. 2. Analysis explanation of the major issue’s progress as well as its influence and solution □Available √Not available Implementation progress of share repurchases □Available √Not available Implementation progress of reducing repurchased shares by the way of centralized competitive bidding □Available √Not available 7 2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. 3. The commitme nts that the Company’s actual controlle rs, shareholders, related parties, purchasers, the Company and other related parties do not imple ment completely exceeding the time limit within the report period √Available □Not available Commitment Commitment Commitment Commitment Commitment Commitments Implementation Party Type content time period Commitments at shareholding - - reform Commitments made in acquisition - - - - report or equity changes report Commitments at asset - - - - restructuring Yantai Solve Changyu horizontal Non-horizontal Has been Group Co., competition 1997.05.18 Permanent competition performing Ltd. Clear the According to purpose of Trademark brand royalty According to License Contract, Trademark the trademark use fee annually License charged by Yantai Contract, the Changyu Group trademark use fee Commitments at Co., Ltd. shall be annually paid by the initial public mainly used to this company to publicize offering or Yantai Yantai Changyu trademarks refinancing Changyu Group Co., Ltd. including Group Co., will be mainly 1997.05.18 Permanent Chagnyu and Ltd. used by Yantai contractual Changyu Group products. Except Co., Ltd. to 2013 to 2017 publicize during which the trademarks commitment was including not strictly Chagnyu and performed, Yantai contractual Changyu Group products. Co., Ltd. has been performing the commitment. Equity incentive 8 2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. commitments Commitments made to the minority - - - - shareholders of the Company Commitment under timely No implementation or not According to the Trademark License Contract (hereafter referred to as “the Contract”), Changyu Group promises that the trademark use fee annually paid by this Company to Changyu Group shall be mainly used by Changyu Group to publicize trademarks and contractual products. But above- mentioned ‘mainly’ is not a specific number, which is easy to cause divergence due to different understanding and leads to problem appearance during the implementation process. From 2013 to 2017, Changyu Group collected the total trademark use fee of CNY420,883,902, of which 51% should be used to publicize trademarks including Changyu and contract products with the Detailed amount of CNY214,650,790. The amount has been used to publicize trademarks including Changyu explanation for and contract products is CNY50,025,181, with a balance of CNY164,625,609. In 2018 and 2019, the specific reasons of collected trademark use fee for 2017 and 2018 is CNY155,623,907, of which 51% should be used to unimplemented publicize trademarks including Changyu and contract products with the amount of CNY79,368,193. commitment as The amount has been used to publicize trademarks including Changyu and contract products is well as next work CNY12,225,187, with a balance of CNY67,143,006. plan if From 2013 to December 31st , 2018, the accumulated balance that should be used by Changyu Group commitment is to publicize trademarks including Changyu and contract products is CNY231,768,615. not completed in Changyu Group promises that the four-year trademark use fee from 2019 to 2022 will be used for the commitment offset. If insufficient, the shortfall would be filled in one time in 2023. If there is any excess, the period excess portion of the trademark use fee would be collected from the year with excess occurrence. If Changyu Group is not able to implement above-mentioned commitment owing to various reasons, this Company will timely supervise and urge Changyu Group to fulfill its commitment and request Changyu Group to raise funds through bank loaning, assets sales and equity sales etc in order to implement the commitment. For other details, please refer to Announcement on Commitment Issues of Yantai Changyu Group Company Limited disclosed by this Company on April 4th , 2019. 4. The situation of security investment □Available √ Not available There is no security investment during the report period. 5. Entrusted financial manage ment □Available √ Not available There is no entrusted financial management during the report period. 6. The situation of derivative investment □Available √ Not available There is no derivative investment during the report period. 9 2019 the Third Quarter Report M ain Body of Yantai Changyu Pioneer Wine Co., Ltd. 7. The activity registration form of receptions, communication and interview etc. during the report pe riod √ Available □Not available Type of reception Basic information index of Reception Time Reception mode investigation and survey object Investor Relations Activity Registration Form on 2019.09.06 Other Individual September 6th , 2019 disclosed by the Company 8. The situation of illegal external guarantee □Available √ Not available There is no illegal external guarantee during the report period. 9. The situation of non-operating fund occupation of controlling s hareholders and related parties □Available √ Not available There is no non-operating fund occupation of controlling shareholders and related parties during the report period. Yantai Changyu Pioneer Wine Co., Ltd. Board of Directors October28th , 2019 10